‘Misfits’ DO try to fit: Deviations from firm-specific optimal multinationality and subsequent market entry or exit in US law firms

Transaction cost and internalization theory research has demonstrated that ‘misfit’ firms, which deviate from firm-specific optimal levels of multinationality, experience performance decreases. However, we do not know if these firms subsequently adjust their multinational footprints to improve performance. This analysis attempts to fill this gap in the literature, using data in the context of large US law firms from 2003 through 2015. Results...